The Big Benefits Shift

News Updates

The latest Society for Human Resource Management annual employee benefits survey report highlights interesting trends. 2012 Employee Benefits: The Employee Benefits Landscape in a Recovering Economy discusses how benefits have changed during the last 10 years and, in particular, in the aftermath of the Great Recession.

The report finds that "over the last three years, HR benefits budgets have experienced substantial cuts because of the economy. As a result, employers are shifting employee cost accountability and decision-making to employees. This has forced organizations to be creative in their efforts to remain competitive in the recruitment and retention of employees."

Most benefits changes have been driven by rising costs–especially for health care benefits. Benefits options designed to a large extent to reduce cost escalation have had varying results. Cost-shifting, greater employee accountability and preventive strategies are key health care benefits trends. Health savings accounts continue to become a more prominent benefit, putting more responsibility on employees to find ways to keep costs down.

Since 2007, the percentage of organizations offering preventive health care benefits has increased. These include health and lifestyle coaching, premium discounts for getting an annual health risk assessment or being tobacco-free, and rewards or bonuses for completing health and wellness programs. Given the ongoing rise in health care costs, this growing emphasis on prevention is not surprising and is likely to continue in the coming years–especially if chronic health conditions become overwhelming, as projected.

During the last five years, employers that sponsor retirement plans continued to shift toward defined contribution plans and Roth 401(k) savings plans. In 2012, there was a decline in the percentage of employers that offered matching contributions to defined contribution plans. If this trend continues, it could markedly decrease the amount many employees will save for retirement.

The growing demand for more flexible work options may be an underlying factor influencing many other benefits. The percentage of organizations offering some form of telecommuting is once again trending upward after slight declines from 2008 to 2010. And, the percentage of employers offering paid-time-off plans–which combine traditional vacation time, sick leave and personal days into one comprehensive plan–continues to rise.

The survey report offers this advice to HR professionals and employers that want to leverage the benefits they offer to attract and retain talent:

Consider ways to create a more flexible and effective workplace. Workplace flexibility can be a low-cost benefit that has potentially high returns when it comes to attracting and retaining talented employees.

Find the most effective ways to communicate benefits already offered and continue that effort throughout the year. The report states, "It is unreasonable for organizations to assume that employees are able to retain and understand elements of their entire benefits package from a distinct event, such as open enrollment or new-hire orientation."

Jennifer Schramm is manager of the Workplace Trends and Forecasting program at SHRM.  To read the original article, please click here.